The Reserve Bank of India (RBI) on August 12, 2020 has issued a circular for system-based asset classification. RBI issued a master circular no. DCBR.BPD. (PCB) MC No. 12/09.14.000/2015-26 dated July 01, 2015 giving out consolidated instructions on the asset classification and other such related matters.
Further, to increase the transparency in the process of asset classification, RBI has issued relevant instructions to be followed by Urban Cooperative Banks (UCB’s).
The following instructions have been given by the RBI:
• All the UCB’s that have total assets above Rupees 2000 crores as on March 31, 2020 have to implement the system-based asset classification until June 31, 2021.
• All the UCB’s having total asset above Rupees 1000 crores but less that Rupees 2000 crores, shall implement the system-based asset classification from September 30, 2021.
• All the UCB’s that fulfil the above criteria by the end of financial year shall implement the system-based asset classification within 6 months of the end of Financial Year.
• All the UCB’s shall run a pilot programme for the same in compliance with the guidelines of the RBI, so that they are properly equipped.
[Circular No. DOR (PCB). BPD.Cir.No. 1/13.05.001/2020-21]
